With a rich young talent pool and new startups emerging every week, few sectors are more poised for future growth in Chicago than biotech.
The Chicago Biomedical Consortium wants to showcase just that at the Chicago BioCapital Summit taking place at Portal Innovations next Thursday.
The summit will bring local startups together with top investors with the goal of taking some of the inventions coming out of local universities and turning them into biomedical applications and businesses that will benefit Illinois and humankind.
At least that's how Michelle Hoffmann, executive director of the Chicago Biomedical Consortium, an organization funded by the Chicago Community Trust, sees it.
While Chicago continues to see momentum for its biotech ecosystem, headlined by the opening of the Chan Zuckerberg Biohub Chicago, it's still not considered a top-10 market, according to commercial real estate firm JLL.
Hoffmann wants to change that.
She said the summit — which will showcase high-profile speakers at the intersection of academic innovation and commercialization, along with around 80 local startups and academic entrepreneurs — will help bring the new inventions coming out of local universities into the commercial sphere.
"The idea behind this was to do a summit where we can bring VCs that are interested in Midwest innovation and showcase the best innovation we have in our universities here," she told Chicago Inno. "I took over in 2021, and what I realized was that we have a lot of great innovation and we could benefit from the national, if not global, network of biotech VCs and expertise."
The summit comes as biotech, like most sectors, continues to see a slump in VC dollars. In the third quarter, U.S. biotechnology startups collectively raised $5.8 billion across 197 funding rounds, according to the latest Venture Monitor report compiled by PitchBook and the National Venture Capital Association. That dollar amount came with a much lower deal count than Q1 and Q2, indicating that while the size of funding rounds is growing, fewer startups are bringing them in.
Hoffmann spoke to Chicago Inno about how the slump is impacting Chicago biotech startups most and what the city needs to do to take its biotech ecosystem to the next level. This interview has been edited for length and clarity.
What needs to happen for Chicago's biotech ecosystem to take the next step?
Everybody wants to use VC dollars, but I think that VC dollars to some degree can be a lagging indicator. Capital will come. What needs to happen is the ecosystem needs to organize itself so that an inventor in a university, which is far removed from the commercialization apparatus, does not have to spend so much time getting the resources they need to take that next step in developing their technology.
In Boston, for example, if you're in a university, you're maybe one or two degrees of separation away from somebody [who can help with] commercialization. In Chicago, you're probably three to five degrees of separation away. How do we close that gap?
That's really important. I always say Boston wasn't Boston 15 years ago — it was still a relatively nascent ecosystem.
How has the venture capital funding decline seen across markets impacted biotech startups?
There's no question the market has had what can only generously be called a correction. And that's true everywhere. There was so much cash being thrown around in 2021 and 2020. People are starting to realize that you have to show value for your dollars. I think what is great, though, is that if you are early-stage, there's a lot of capital out there. It's really the later stage where people are really sitting on their hands. That's why we've gotten such great feedback from different national VCs that want to come see what we have.
Was it difficult to get VCs to participate next week given the down market?
It wasn't easy. People don't show up because of gimmicks. We've just been doing it one VC at a time. It's not something where you can mass email. You have to go group by group and really understand what they are interested in. Everybody writes different checks.
What competitive advantage does Chicago have in biotech?
At the end of the day, biotech lives or dies by the amount of academic innovation — that's the hill I'm ready to die on. The fact that we have four Tier 1 research universities within Illinois is one of our greatest advantages. The other thing is that we bring a different view to how we approach biotech. We are very engineering-heavy. The Midwest is an engineering mecca and you see that filter into our biotech as well. What we need to do is put some elbow grease into organizing the ecosystem.
